Integrated thinking on integrated reporting practice: evidence from public listed companies in Sri Lanka

Abstract

Purpose This study aims to offer empirical evidence on how integrated thinking affects the integrated reporting (IR) practice and how integrated thinking originates from board and management involvement, cross-functional integration and integral link between capitals and strategies. Design/methodology/approach This study is cross-sectional and uses a mixed-method approach. The empirical data for the quantitative approach were collected from the 129 public companies listed on Colombo Stock Exchange in Sri Lanka. The personale responsible for preparing the annual report are selected as the respondents of this study. This study used partial least square modelling to test the hypotheses. The quantitative approach results are triangulated across a qualitative research approach in semi-structural interviews with ten responsible officers of integrated reporting practices. Findings The central finding of this study is the significant positive relationship between integrated thinking and integrated reporting practice. The qualitative results supported the quantitative findings and show that board and management involvement, cross-functional integration and integral link between capital and strategy enhance the integrated reporting practice. Top management and board management have positive beliefs about the integrated reporting practice; they initiate, encourage, influence, involve and support it. Furthermore, all company departments are involved with the integrated reporting led by the finance department and practice good coordination, communication and collaboration between departments. Moreover, it also evidenced their concern about the linkage between capital and strategy and how they do it in their organisation when practising integrated reporting. Research limitations/implications The firms which intend to practice or enhance integrated reporting will be benefited from this study. Hence, this research assists in constructing IT through the direct role of the board and senior leadership, breaking down silos to diffuse IR throughout structures and processes, and concentrating on strategies while managing their capitals and relationships over the long term. Originality/value This study provides the initial quantitative empirical evidence on the impact of integrated thinking on integrated reporting practice. To the best of the authors’ knowledge, this study is the first to operationalise both integrated thinking and integrated reporting based on a questionnaire that developed and tested both constructs as higher-order reflective formative and on the relationship between integrated thinking and integrated reporting. The mixed-method approach to examine the relationship between integrated thinking and integrated reporting provides additional insights into the existing literature.

The influence of XBRL technology on the quality of financial reporting: exploring mediating variables in the Indian context

“…The present study demonstrates that the role of technology such as XBRL is efficient business reporting with maximum stakeholder reach through a single electronic document. More precisely, this paper contributes to the accounting and business reporting literature by extending the earlier studies (for instance, Siano et al, 2018;Bernardi, 2020;Abeywardana et al, 2022;Tawiah and Borgi, 2022), as these studies mainly focused on particular aspects such as XBRL and its influence on timeliness, quality of financial reporting, information asymmetry and so on. However, the present study attempted to prove the multidimensional influence of XBRL on various business reporting aspects such as financial reporting, regulatory filings, integrated reporting, auditing and assurance issues and financial reporting quality at large.…”

“…Technological advancement through XBRL for financial reporting influences the way companies share information with their stakeholders and allows financial data to be shared globally using a digitalized global standard language (Tarmidi and Roni, 2014). The advent of such technology has directly influenced the traditional mode of financial reporting and has contributed to a better transformation of financial reporting in a customized manner (Abeywardana et al, 2022). It is also possible to include non-financial information in business reports in a harmonized manner because such technology works based on pre-coded rules (Mao and Zhang, 2019).…”

“…Sustainability reporting, integrated reporting and ESG reporting are the most popular business reporting practices among other reporting practices (Siano et al, 2018;Bernardi, 2020). They Influence of XBRL technology combine both financial and non-financial information in a single report (Abeywardana et al, 2022). Standardization of the framework for sustainability reports is possible through XBRL, which can meet the requirements of the Global Reporting Initiative's (GRI) sustainability reporting guidelines (Arndt et al, 2006 andSeele, 2016).…”

“…Today, the concept of financial reporting is modified by including ESG (environment, social and governance) aspects and is popularly called integrated reporting (Velte and Stawinoga, 2017). There is no uniformity in the integrated reporting practices of companies across the globe (Abeywardana et al, 2022). By using standardized reporting technology such as XBRL, harmonization in integrated reporting practices can also be achieved (Bernardi, 2020).…”

“…The main theoretical contributions of this paper to technology in financial reporting, XBRL and accounting literature are that it sheds light on the influence of the use of technologies in the business reporting process and their influence on various aspects of business reporting, which has only received confined focus from earlier studies so far (Siano et al. , 2018; Bernardi, 2020; Abeywardana et al. , 2022; Tawiah and Borgi, 2022).…”